Is Utah ready for another professional sports team? A look at market size, business support, and other factors that may make the difference

Can Utah handle a new major professional sports franchise?

That question has been on a lot of Utahns’ minds since Arctos Sports Partners bought a minority stake in the Utah Jazz last week.

In announcing the partnership, the Smith Entertainment Group and Arctos said they were “bullish on the Utah sports and entertainment market” and aligned in SEG’s expansion plans, including “its intention to bring a third professional sports franchise to the state.” That could mean a Major League Baseball, National Hockey League, or even an NFL franchise in Utah someday.

Can they do it? Would it work?

Stephen Bronfman, the son of former Montreal Expos owner Charles Bronfman, is himself trying to relocate an MLB franchise back to his city — and he says that there’s a five-item “checklist” that a successful sports franchise requires. As listed to CBSSports, those five elements include “very strong mixed-use development, great media partnership, strong local corporate support, great fan base, and a very well managed business.”

It’s as good of a checklist as any when determining whether Utah, and the Smith Entertainment Group, can realistically pull off the dream of bringing a new franchise to the state.

So how might Utah come off in these measures?

Mixed-use development

No longer is a stadium just a stadium. It’s even hard to say that it’s still fashionable to build one downtown, in population centers.

Look no further than the two most recently opened MLB parks — Globe Life Field in Arlington, Texas, and Truist Park in Cumberland, Ga. Globe Life Field sits about 18 miles away from the city center of Dallas, while Truist is about 14 miles away from Atlanta’s city center.

Why would these teams be so far away? Team owners now see new stadium projects as the chance to lead real estate development, using sports teams as a draw for a variety of economic activities.

The Rangers’ ballpark now sits adjacent to a newly-built shopping mall with 12 restaurants, plus new hotels. Much more is to come: an “upscale residential community,” a new convention center, and new corporate offices, for companies big and small. The project has been developed in a partnership between the Rangers and The Cordish Companies, a real estate development group. They say they’ve invested $2.4 billion in the project, so far.

The Braves controversially moved from downtown Atlanta to the suburbs, where Truist Park is located in “The Battery.” That’s a brand new development with more than 20 restaurants and bars, a separate 4,000-seat live music venue, 15 shops, multiple hotels and apartment buildings, and three office buildings — including a nine-story office building occupied fully by Comcast and another that will be the future corporate headquarters of Papa John’s. At opening in 2017, the project had cost $1.1 billion, built by the Braves Development Company.

Utah has its own land that officials see as ripe for development: the old prison site in Draper. They figure the site — they’re calling it “The Point” — could be the home for “lots of housing, office towers and retail outlets in a way that lures new residents to the area and fosters widespread economic development,” The Tribune reported earlier this month. Ultimately, government officials believe nearly 15,000 residents could live at The Point.

One quite important government official, Gov. Spencer Cox, also felt that the site could include a baseball stadium.

“We would love to have a baseball team,” Cox said at a news conference last Monday, “and I agree that this would be a great place to have a baseball team.”

Draper mayor Troy Walker said the same in an interview on KSL Newsradio. “I keep hoping, and I’m not going to stop talking about having a stadium out there. I don’t care if it’s NFL or Major League Baseball, either one or both,” he said. “So we’re hopeful that things like that are gonna come there. That’s something I’ve always wanted to see.”

Now, this development planning is already well underway at The Point, so it’s not exactly clear if or how the Smith Entertainment Group could theoretically get a share of the development proceeds, as the Rangers and Braves have done.

Meanwhile, an NHL team could conceivably play in Vivint Arena — but it would be a tough fit. The arena holds only about 14,000 fans in its hockey configuration, which would be less than any arena in the NHL. Fans attending preseason NHL games at Vivint noted iffy sightlines and poor lighting thanks to the arena being simply designed for basketball. A new stadium would likely be required.

Media partnership

The revenue from a team’s local TV deal is a huge part of an MLB or NHL team’s ability to survive and thrive in any market.

In baseball, midlevel or small market teams generally earned about $40 million to $50 million per year on their local TV deals in 2020. There are 162 games, nearly nightly watching for six months, and that’s worth a lot of money in eyeballs.

In hockey, midsize market teams made about $10 million to $20 million from their local TV deals in 2020 — rivaling the approximately $20 million each team earned from the league’s national TV contracts.

But finding a media partner willing to fork over tens of millions of dollars — while still providing fans of all ages realistic options for watching the games legally — has proved to be a pain for the Smith Entertainment Group and the Utah Jazz. The team recently opened up negotiations after more than a decade partnered with the regional sports network (RSN) now known as AT&T SportsNet.

Part of the problem is that the Jazz are currently a lone wolf in Utah. (Real Salt Lake’s local media deal was won in league-wide negotiations by AppleTV.) RSNs usually exist in bigger market cities and show the games from multiple franchises. In Utah, AT&T SportsNet does show Rockies games to a mostly disinterested Utah audience — but they haven’t been able to make big dollars selling ads to Utah-based Rockies fans. A new major pro sports team in Utah would double or even triple the inventory of interesting games available to a Utah RSN.

But the biggest problem is the state of the RSN industry nationally. Many RSNs have become significant money-losers, as the per-subscriber fees they relied on to make money dwindle as viewers cut the cord or their provider cancels access. Frankly, that trend is likely to continue — and three major sports leagues (NBA, NHL, MLB) have yet to really come up with a solid solution on how to deal with it.

An NFL team would skip all of those hurdles: Their behemoth national TV deal, which also shows local games to local audiences, provides essentially all of the media funding.

Local corporate support

It’s no secret that franchises rely to a large extent on financial agreements with local businesses — especially big corporations that have their headquarters in the market.

And to be sure, business in Salt Lake City and Provo is booming. In the Milken Insititute’s list of Best Performing Cities in the U.S. for 2022, Provo ranked No. 1, and Salt Lake City ranked No. 3.

You can see why a stadium located between the two at the Draper prison site might be appealing for a franchise. Teams could sell businesses from both Salt Lake and Utah counties on a short commute to the game, where a box suite could be waiting.

But how does the growing local corporate support compare to other markets in search of another professional sports franchise?

It’s hard to nail this down exactly, of course. But of the companies listed in the 2022 Fortune 500, the 500 largest companies in the U.S. by revenue which in total sum to about two-thirds of all U.S. business done — Utah has exactly zero headquartered here. That compares unfavorably to other cities seeking a professional sports team.

Utah does have five companies headquartered here which rank among the next 500 largest companies, however.

There’s a further argument to be made that the Fortune rankings don’t matter much — that it’s actually up-and-coming businesses that may be more likely to spend on sports sponsorships. Everyone knows what Walmart is, but a new store needs to advertise to gain attention. On the other hand, those companies may come and go more frequently than local behemoths that are willing to write checks year after year.

Fan-base size

Of course, you need fans to go to the games.

Once regarded as one of the smallest markets in the country, the Salt Lake City combined statistical area — which includes Ogden, Provo, and Park City — has been rising up the charts quickly in recent years. As of 2021, that CSA ranks No. 22 in the nation. It’s a real major league destination!

There are, however, bigger markets that have yet to receive MLB, NHL, and NFL teams. Here’s how the Salt Lake City area compares to other competitors.

Of course, it’s also worth thinking about how many fans would need to attend games.

NHL arenas seat at least 15,000, for 41 home games per year. The Jazz have sold out their last 200 games at an 18,306 capacity, though because the NBA and NFL largely share their winter seasons, one sport may pull attendance from the other. The Utah Grizzlies, the state’s minor league hockey team, averaged 4,249 fans per game last season.

MLB stadiums are larger, with capacity for 35,000 to 56,000 fans for each game. There are 81 home dates on each year’s calendar, meaning 2.8 million tickets would need to be sold in total for each game to sell out — which is more than one per person in the SLC combined statistical area. However, most MLB stadiums don’t sell out for every game. Attendance averages in 2022 stand between 9,000 and 48,000 fans across MLB’s 30 teams. In 2019, average attendance for Salt Lake Bees games stood at 6,239.

NFL stadiums seat at least 60,000 people for eight home games. That seems doable, given that 51,000 seat Rice-Eccles Stadium and 63,000 seat LaVell Edwards Stadium can and do fill up for their home games.

And of course, you might be curious how many fans of each sport exist in Utah. In a 2015 poll conducted by Dan Jones & Associates, Utah sports fans were asked which professional sports were important to them. In all, 86% said basketball, 62% said football, 59% said soccer, 39% said baseball, and just 24% said hockey. Of course, a new major league franchise would likely change those numbers.

A well-managed business

It’s clear from their announcement last week: The Smith Entertainment Group and Arctos Sports Partners hope to be the owners and operators of a third major professional sports team in Utah.

But how would they bring one in? Sports ownership is an exclusive club.

First, there’s the expansion route. The NFL and NHL stand at 32 teams each, with hockey just having completed a round of expansion in Las Vegas and Seattle. Both leagues say they’d probably like to stay at that number of teams for the foreseeable future.

Major League Baseball, though, stands at 30 teams. Commissioner Rob Manfred has said his goal is to have 32 teams in his league, and was actively pursuing expansion plans until the 2020 pandemic delayed the process. More recently, ownership and stadium turmoil has pushed expansion further out.

The other route would be to just be purchasing a team from another market, from a seller that doesn’t want to be in the professional sports business anymore, then to move that team. That’s much easier said than done.

Two MLB teams have said they’re up for sale: the Los Angeles Angels and the Washington Nationals. The Angels’ Arte Moreno announced this week his intention to sell the team, after the Anaheim city council negated a $320 million deal that would have given Moreno the ability to develop around Angel Stadium, because the deal was negotiated illegally. The city paid a $96 million fine following an FBI probe related to the matter. However, the team’s lease with the ballpark lasts until 2029.

The Nationals have been up for sale by the billionaire Lerner family since April, for unclear reasons. Bidders with both local Washington ties and those without have registered their interest, and Lerners hope to get between $2 billion and $3 billion for their franchise. But their stadium lease prevents relocation until at least 2038.

The Oakland Athletics have a truly awful stadium situation in their current Coliseum home, but current owner John Fisher looks set to maintain control over his club regardless if it stays in the Bay Area or moves to Las Vegas, where they’ve narrowed down potential stadium sites. And the Tampa Bay Rays are still trying to figure out their situation. They’ve already threatened to move part-time to Montreal, but MLB rejected the plan. Their ownership also wants to keep their club, seemingly regardless of location.

In the NHL, the Arizona Coyotes always look on the brink of relocation, and currently are slated to play in a tiny 5,000-seat arena on the campus of Arizona State University next year. However, the team denied a 2021 Forbes report that they were for sale — the report said they were likely to be sold to a buyer who would move them to Houston.

The NFL’s Denver Broncos just sold for nearly $5 billion; as a result, there aren’t any other teams on the market at the moment. Some members of the Chicago Bears and Los Angeles Chargers ownership families reportedly want to sell, and it’s easy to imagine the NFL finally pushing out Washington Commanders owner Dan Snyder after one more scandal. And Seattle Seahawks owner Jody Allen has been somewhat disconnected from her franchises since the death of brother Paul Allen in 2018.

But, frankly, good luck relocating those franchises, which have long histories with massive fan bases in their cities (with perhaps the exception of the Chargers, who just built a new stadium of their own).

There’s another big hurdle to the Smith Entertainment Group and Arctos Sports Partners pairing up to buy a franchise: The NFL doesn’t allow institutional investors like Arctos to purchase ownership stakes. At the moment, they’d be out of luck.

Still, there’s a pitch to be made here: that Salt Lake City, with its sizable local market and growing business environment, is one of the country’s best places to open a major league franchise. But so many hurdles remain, and other growing cities have very solid resumes, too. Finding the right opportunity to move a team will be extremely challenging, and there’s not an obvious immediate candidate.

But is it feasible another pro sports team could succeed in Utah?

To be sure — and more than ever before.

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